By Today the importance of cash management in organizations is increasingly recognized, which is reflected in the designation of an executive as treasurer, who is responsible for a number of key functions to ensure optimal operation.
The first step in structuring a cash management program in a company is to set specific objectives, which should lead to define the activities of the Treasurer and those of the staff in charge. Likewise, the indicators should be defined for the evaluation of the area’s performance and its relationship with other units of the organization to create an enabling environment for collaboration.
The treasurer must ensure the liquidity of the cash and plan the destinations of surplus that may result after the operation and must also deal with the relations with financial sector and carry out the negotiations to guarantee the most adequate services and products for cash management, as well as access to lines of credit at preferential rates.
The treasurer should also advise senior management on the impact of cash on daily operation plans and capital investment programs. These measurements must be comparative from year-to-year or with measurable targets for the same period.
It is a question of establishing a model of treasury management in which the treasurer’s abilities to neutralize the variables that affect the profits and that appear after the operational utility of the company are reflected.
On the other hand, the establishment of a cash management program has an impact on the most basic functions of the company like the approval and updating of loans to customers and control of accounts receivable. Therefore, it must be implemented in a methodical and gradual manner to generate consensus on benefits it will bring to the organization.
The second step is to perform an analysis of the current situation in collections and payments and define the options for improvement in those processes, including the people involved. Given the great responsibility facing the role of treasurer, the elect must have certain personal qualities that help to perform in a superior way. The ability to relate to other people, for example, is necessary because they will have to communicate with other managers of the organization and assume responsibility for developing and establishing good links with financial entities that serve the company.
Creativity, analytical skills, action orientation and attention to detail are some of the desirable skills in a professional who is in charge of an organization’s treasury.
The definition of the position of treasurer or CFO within the strategic structure of the companies is a success that will allow to continue strengthening the concept that companies are nowadays valued by the capacity to generate enough cash to fulfill their obligations in time, replenish their working capital, make replenishment of fixed assets, if applicable, pay taxes and distribute profits.
